Home Builders See Sales Jump as Renters Flee Apartments

New-home sales plummeted for four weeks after the nation shut down and then reversed course. Many would-be purchasers are renters who want more space.

NEW YORK – Sales of newly built homes started to rise over the past two weeks, according to John Burns Real Estate Consulting (JBRC). Activity plummeted in the first four weeks of the national shutdown, with sales down 85% from normal spring activity by the fourth week.

“We’re still down roughly 65%, but more positive news is coming out of the new home market, particularly for builders who are targeting the first-time and entry-level buyers,” says Devyn Bachman, manager of research at JBRC.

More renters are leaving their apartments and looking at new homes, she says. Her research reveals that demand for new construction is skewing towards renters, especially young couples with two incomes who feel secure in their employment.

Regarding the appeal of new homes during the pandemic, Bachman says, “It’s safe, it’s clean, it’s new, and it’s easy to show at this point. Lots of the builders have set up virtual tours on their websites, the sales agents are setting appointments for consumers to come in and tour models in a safe distance manner. They’re actually able to show the new home, where in several markets it’s very difficult to see resale listings at this point.”

Source: CNBC (04/27/20) Olick, Diana

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